Thursday, May 18

Cedar Fair: A Return to Fun

The analyst team here at Moby.co has noticed a significant shift in how U.S. consumers are spending their money over the last quarter and we're building a lot of strategies around it. 

In a nutshell, while the rest of the market is watching retail earnings come in weaker than expected, we're trying to figure out the mechanics of that shift.

A fairly large segment of investors are betting that declines seen in retailers like Home Depot are due to consumer spending overall finally cracking under the pressure of inflation. 

But, looking at other spending trends across the economy, we're noticing another aspect of depressed retail spending. 

Consumers aren't spending less so much as they are shifting their spend. Right now there is a massive move from buying things to buying experiences. 

The biggest signal we got for this thesis was Six Flags' earnings call earlier in May when the stock skyrocketed on a huge increase of revenue-per-visitor at their parks. 

We're watching as pandemic-exhausted consumers shift their very limited budgets to basically anything outside. Travel is up, experiences are up, and way more. 

And after a few weeks of watching these trends, we're ready to initiate coverage in one of the stronger-positioned theme park plays in the U.S.: Cedar Fair ($FUN). 

Of all the regional theme park stocks, Cedar Fair has the margins and the right trends we want to see to make them a strong pick even if consumer spending continues to decline all the way into a potential recession.

Cedar Fair has initiated network-wide improvements to get strong, consistent revenues out of their parks that have us really bullish on their 2023 outlook. 

With wider America basically treating COVID like it's already over, it's clear now that people are just trying to get back outside in 2023. 

Hopefully, this time we're dealing with a rollercoaster stock that only goes up. Let's check out some details 👇

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